Probe of school projects widens; State's attorney in Carroll County has new information

Jennifer McMenaminTHE BALTIMORE SUN

Carroll County State's Attorney Jerry F. Barnes said yesterday that he is broadening a grand jury investigation beyond the embattled school construction department to look at overall fiscal management of a school system that consumes half the county's annual budget.

Barnes said he has received second- and third-hand information from current and former school employees about other situations that could warrant a grand jury's attention.

The new information, he said, is not part of a 100-page report released last month by a team of attorneys and former FBI agents hired by the school board to conduct an inquiry into bungled school construction projects.

"In light of that influx of information," Barnes said, "we have decided to give anyone who has the desire to provide any information in regard to the school system a contact person so they can speak with us directly and anonymously."

He said grand jurors have "stepped up" their meetings and will continue to meet frequently for at least several months. Barnes said he could not elaborate on how often the jurors have met or how many witnesses have been subpoenaed.

A person familiar with the investigation said that at least one school employee has been leaking information and documents to the state's attorney's office. "There is an awful lot of information flowing again," the person said.

In a report made public last month, investigators led by former U.S. Attorney Richard D. Bennett documented cases in which school officials accelerated projects despite warnings from architects and contractors of construction problems, appeared to favor certain contractors in the bidding process and accepted substitutions of cheaper building materials without later accounting for the money presumably saved.

In describing a department beset by chaotic record-keeping and disorganization, investigators documented differing accounts from school employees who handling funds and bids.

Pressure to approve

One employee told investigators how the construction supervisor at the time circumvented the purchasing department, preparing five bid packages for a school board meeting where a purchasing department employee was asked to approve the documents without reviewing them. When the employee refused, Superintendent William H. Hyde asked her to "sign off one last time to get them by what he referred to as 'this embarrassing moment,'" according to the report.

Hyde, who did not return phone calls last night, denied making that request, the report said.

In recommending fiscal reforms, investigators suggested better filing of documents, a universal accounting system, and a clearer statement of policies dealing with how contracts are bid and how money is transferred from project to project. Although investigators found no evidence of internal fraud or embezzlement, they noted that the accounting process was in such disarray that it would be easy for employees to engage in illegal practices.

But based on evidence in the report and a sealed portion that Bennett sent straight to the state's attorney's office, Barnes expanded the yearlong grand jury inquiry last month to investigate possible kickback schemes, thefts, perjury and misconduct in office.

Yesterday's expansion further widens the inquiry, which began last year when Cranberry Station Elementary School opened more than $2 million over budget -- school officials say it was closer to $1 million -- and after the school system built a wastewater treat

jv0 ment facility at Francis Scott Key High without state permits.

"This is very serious. I believe it goes much further than facilities," said school board member Susan W. Krebs, the only person on the five-member school panel to publicly express outrage over incidents documented in the report. "There are serious concerns and the embarrassment will continue."

She said she would like county commissioners to become more involved in the situation but added that one commissioner has told her privately that the school system's problems are "no big deal."

Mistakes 'covered up'

"These are not just mistakes," Krebs said. "These are mistakes that have been covered up."

Other school board members did not return phone calls.

The commissioners took several steps this month to exert more control over the Board of Education, which spends almost $134 million of the county's annual budget of $268 million.

The commissioners are directing funds this year to specific categories in the school system budget, such as textbooks, administration and instructional staff, rather than awarding a lump sum. They hired a consulting firm to conduct a three-year performance audit of the school system and a construction consultant to oversee work at the site of a new high school in Eldersburg.

And Commissioner Robin Bartlett Frazier unsuccessfully tried to stop preliminary construction work on a new Westminster high school, asking why school officials would proceed with a $34.5 million project before sorting out past problems.

Barnes agreed yesterday that school officials ought "to be very cautious [starting projects] in light of the very recent past history."

Officials said that individuals with information relating to the grand jury's investigation can call or write in confidence to Assistant State's Attorney Jerome J. Joyce at 410-386-2671 or CCSAO, P.O. Box 606, Westminster, Md. 21158.